Getting Fed Matters Right
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 11 February 2022
⏱️ 15 minutes
🧾️ Download transcript
Summary
Long-time readers know that I have strong opinions about the Fed, about monetary policy, about its relevance to economic conditions, and of course about its implications for investment decision-making.
Today we have enough misinformation out there about the Fed that it may be a chance to actually use that word appropriately. And this misinformation comes in a period of elevated interest. The stakes are high.
This week in the Dividend Cafe we are going to see if we can’t make more sense of what the risks are and are not around current Fed actions. And in so doing it will allow us (force us?) to touch on a handful of peripheral subjects that matter. It’s an easy read, digestible, and actionable.
So jump on in to the Dividend Cafe …
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividend Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:10.0 | Well, hello and welcome to the Dividend Cafe. I am so excited to be back here in my New York office studio to record. |
| 0:20.0 | It's been a whirlwind week |
| 0:22.9 | travel and things and looking forward to a Super Bowl weekend. I think that most listeners and |
| 0:32.5 | viewers and readers are aware or maybe suspect that I am not a big sleeper, but this week has been like |
| 0:42.2 | one for the record books, even for me, for a number of reasons. |
| 0:47.1 | And so I'm looking forward to the weekend, but not really as much as I'm looking forward |
| 0:50.7 | to sharing with you right now a couple of things that are on my mind about the Fed. |
| 0:56.2 | I talk about the Fed a lot. The Fed is being discussed a lot and right now there is a narrative that |
| 1:03.8 | it doesn't seem to be being noticed by people that the Dow is like barely really moved. It's still sitting there very near, not at, |
| 1:14.6 | but very near all-time highs. And we're talking about the potentially catastrophic circumstances |
| 1:22.6 | of the Fed raising rates to something near or at a whopping 1% and what that could mean to risk takers. |
| 1:31.9 | And I want to share with you a view on the Fed and their rate policy that is wrong, |
| 1:38.9 | which is kind of what the one you hear all the time. |
| 1:41.5 | And then I think one that is right. |
| 1:46.2 | And it is not one that says always rosy. It's one that shares a risk and shares, I think, a realistic approach to thinking |
| 1:51.8 | about risk taking and the implications on risk taking from monetary policy. But I think it does so |
| 1:58.8 | more intelligently and with a little more information. That's what |
| 2:01.7 | my goal is today in this sleep-deprived version of the dividend cafe. Let me basically just say this |
| 2:13.2 | to start, okay? The Fed's great benefit to markets and two risk takers for the last 25 years. |
| 2:22.5 | It's not a myth. There has been a benefit to those taking risk in credit, in equities, obviously, |
| 2:31.6 | the stock market and real estate and commercial real estate and levered |
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